This paper considers the problem of estimating treatment effects when there is a large number of potential control units. The paper introduces to the economics literature the idea of polytope volume minimization as a method of estimating a factor model when observed outcomes are assumed to be a...

Measurement error is a potential problem with estimating the wage effect associated with first-differences in twin's education levels. To account for this, Ashenfelter and Rouse (1998) provided two reports of each twin's education level. One is the own report and the second is the sibling's...

This paper considers a restriction to non-negative matrix factorization in which at least one matrix factor is stochastic. That is, the elements of the matrix factors are non-negative and the columns of one matrix factor sum to 1. This restriction includes topic models, a popular method for...

Standard economic theory and intuition suggests that the free rider problem will overwhelm firm-wide incentives in large firms. Despite this, such schemes are relatively common in manufacturing firms and may be more popular in larger firms. This paper models an optimal incentive contract and a...

This paper presents a natural generalization of the von Neumann and Morgenstern axioms to a space of random samples. The representation allows for preferences that exhibit ambiguity (or uncertainty) aversion in a way that is analogous to risk aversion. The recursive representation also satisfies...

A basic tenet of incentive theory states that there is a trade-off between risk and incentives. By implication, greater variation in firm profits leads to a reduction in the use of profit sharing. Surprisingly, there is little empirical evidence for this relationship. This paper reexamines the...

The paper presents exclusion restrictions that allow identification of returns to schooling using data from the National Survey of Young Men (1966) (NLSYM66). The approach does not use instrumental variables (IV) or control function approaches. Instead, a non-parametric finite mixture model is...